Broadcom (AVGO) Stock Price Forecast: Apple Deal to 2031 Breaks the Downtrend - Worth $373?

Broadcom reported second-quarter revenue of $22.19 billion, which was slightly below the analyst consensus estimate of $22.27 billion. Analysts expected Q3 AI semiconductor revenue to come in at $16.36 billion, but Broadcom forecast the figure to be $16 billion. This led to a roughly 20% drop in the price of Broadcom stock in June as traders realized Broadcom would miss consensus second-quarter and third-quarter expectations. This missed expectation for another guidance increase came after a run in Broadcom AI semiconductor revenue that has been nothing short of sensational.

A secondary fear is that Apple will replace the chips in its devices with its own custom designs at some point. The new contract with Apple addresses these concerns as it extends the supply agreement through 2031 and expands it to include custom AI semiconductor chips. The new deal goes beyond that and involves the development and supply of custom ASIC chips for multiple generations of devices for the iPhone, iPad, and Mac. Broadcom shares traded above their 100-day and 200-day moving averages after the announcement of the new agreement. Broadcom shares moved above their 100-day and 200-day moving averages, reflecting improved investor confidence after the selloff.

Broadcom posted Q2 2026 AI semiconductor revenue at $10.8 billion, 143% up year over year, which is its top performing segment. Broadcom’s average Wall Street target of roughly $517, 38% above Broadcom’s current price, assumes that growth. Broadcom CEO Hock Tan said Broadcom is still targeting $100 billion in AI chip revenue in 2027. Q3 2026 revenue will be $29.4 billion, Broadcom guidance said in a statement, compared with Q2 of $22.2 billion.

Broadcom also said in the statement that it entered an agreement for an AI processor, which will expand its customer base beyond hyperscalers, including Google, Meta, and Apple, that buy Broadcom’s AI chips.

One big question is whether AI growth will persist. Broadcom’s Q2 revenue miss and Q3 AI-guidance lower than Wall Street expectations raised doubts on whether hyperscalers may be scaling back their AI spending (a reason why analysts at Erste Group downgraded Broadcom to Hold in July 7). Broadcom is trading at ~60 trailing earnings, so it’s a gamble that the AI growth rate continues. There are some bright spots like the Apple agreement, which is good for long-term revenue visibility. But Broadcom needs to make continued progress toward its $100 billion AI chip revenue target in the future.

Back when the chart above was created on the 4H time frame prior to Monday's Apple deal rally, AVGO sat at $370.14 within the descending trendline with RSI 47.83 neutral. The Apple deal rally now testing the channel resistance from the inside. "A breakout in Broadcom may be forming," CNBC observes. Short < $360.90 for a target at $336, stop > $377.30.

Broadcom (AVGO) Stock Price Chart - Source: Tradingview

That said, the options market puts/calls at 0.55x suggest bullish skew, and the September contract price on the upside implies the possibility of a move to $438 in the upcoming two months. Thus, the $377.30 stop now becomes the key decision level: a hold > $377.30 flips the technical bias to the breakout case and negates the short trade.

1. Short entry: Under $360.90; the descending channel keeps going
2. Target: $336.00; channel projection
3. Stop / Breakout: $377.30; above which the $438 breakout becomes the bull case
4. The Apple deal extends to 2031 for a custom ASIC for several generations of products
5. Q2 AI revenue $10.8B, +143% YoY; Q3 guided $29.4B total, $16B AI chips
6. CEO's 2027 goal: $100B in AI chip sales; Analysts average $517 (+38%)

On July 6, Broadcom shares surged between 3.7% and 5% after Apple declared that it will continue to purchase Broadcom chips until 2031. The multi-year pact goes beyond wireless and connectivity chips, extending to a range of Broadcom’s custom ASIC silicon over several generations of Apple products. The agreement comes on the heels of CNBC reporting that Apple accounted for 20% of Broadcom’s annual revenue last year. It also helps ease investor concerns about whether Apple plans to eventually phase out the chips it buys from Broadcom in favour of in-house designs, meaning Broadcom will still have Apple’s business for the remainder of the 2020s.

Broadcom shares fell almost 20% off their $495 52-week highs after the company reported fiscal second-quarter 2026 results. The company posted revenue of $22.19 billion, slightly below analyst consensus estimates of $22.27 billion, and it provided fiscal third-quarter AI chip revenue guidance of $16 billion, trailing consensus estimates of $16.36 billion. The misses were relatively small, yet given that the company now trades at roughly 60x trailing earnings, even a tiny earnings miss can have an impact. Additionally, investors continued to express worry over Apple’s long-term chip-making plans.

As noted previously, the extension to the Apple deal improved Broadcom’s technical picture and weakened a bearish setup that was in place before the news. CNBC has even stated that a potential breakout is developing in the stock’s technical picture. According to CNBC, the options market is also indicating that upside could be in play. The average put-to-call ratio for the stock is 0.55, well below the neutral benchmark of 1.0, which reflects positive sentiment and a bullish outlook. CNBC noted that the price target implied by the put options is $438, roughly 17% higher, by mid-September.

However, the positive outlook was offset by Erste Group’s July 7 downgrade to a Hold rating on Broadcom. The stock’s breakout level, $377.30, is unchanged. A sustained rally above $377.30 is required to invalidate Broadcom’s descending channel and price target of $336. For those more long-term investors, the average analyst price target of around $517 per share, implies 38% upside.

Broadcom shares were trading at $373 after rising roughly 4% on news that Apple will continue purchasing its chips until 2031, effectively quelling concerns about customers or a loss of customers to in-house chip-making. Broadcom posted $10.8 billion of AI semiconductor revenue in fiscal second quarter 2026, 143% higher year over year. CEO Hock Tan has said that the company aims for $100 billion in AI chip-related revenues by 2027.

However, the company’s second-quarter revenue miss as well as its fiscal third-quarter 2026 AI revenue guidance of $16 billion, were softer than analysts expected. Broadcom’s breakout level, $377.30, remains the key price to watch. A break above this level would help the case for a rally to $438 and keep the downside target intact, a failure to hold above the key level would maintain the descending channel as well as the target of $336. While the average analyst price target stands at around $517 per share, Erste Group’s Hold rating points to a more cautious view for the near term.